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Corporations, the Original Understanding, and the Problem of Power

How did Americans of the late eighteenth century conceive of the corporation and of its role in society? And how did that understanding square with the original, publicly understood meaning of the Constitution and Bill of Rights? More to the point, in the wake of the Supreme Court’s controversial decision in Citizens United, would late-eighteenth-century Americans have thought that a corporation enjoyed the "freedom of speech" that the First Amendment guarantees? This paper wrestles with those questions. It attempts, first, to articulate the "original understanding of the corporation," arguing that for Americans of this period the corporation presented what might be called a problem of power. Case studies of numerous corporation controversies in the eighteenth century demonstrate that there was a recognized need both to delimit legislative authority over the creation and subsequent regulation of corporations and to limit corporate influence in private and public life. The solutions that emerged in this period were aimed at curtailing the frequency of special-interest laws, legislative partisanship, and corruption. The second half of the paper then focuses on how these concerns about corporate and legislative power square with, and are reflected in, the original meaning of the Constitution and Bill of Rights. In drafting these documents and establishing the national government, the Framers were presented with their own problem of power. This paper argues that the solutions they adopted support free speech protections for a corporate body.

The First Amendment was phrased and understood as an express limitation on congressional authority. Because it aimed specifically at the powers of Congress, and not at the rights of speakers as such, text and contemporary understanding strongly suggest that the amendment limits the ability of Congress to restrict “speech,” regardless of its source. This view is buttressed by the nation's first free speech controversy in 1794, involving politically active groups that successfully repelled a congressional attempt at censure, despite the charge that their “self-created,” permanent status deprived them of First Amendment protections. By close analogy, the First Amendment as originally understood would deny Congress any ability to abridge the speech of an incorporated group.

While this conclusion seems sound as a matter of text, contemporary understanding, and post-ratification practice, it is not the case that the Framers took no account of the problems of rent-seeking and corruption that preoccupied participants in contemporary debates over the corporation. To the contrary, the Framers recognized that powerful interest groups (“factions”) would shape national politics and might exercise an undue influence in public affairs. Their solution, however, was not to lodge a power in Congress to regulate and restrict these groups’ participation in the political process. It was, rather, an institutional solution - a series of structural safeguards built into the Constitution and designed to limit possibilities for rent-seeking and corruption. These included the separation of powers, a bicameral legislature, regular elections, and more. Juxtaposition of these two solutions - the First Amendment’s limitations and the Constitution’s institutional controls - make out a strong case that, for the founding generation, a corporation would have enjoyed the First Amendment’s protections for “freedom of speech.”